It is one thing to set up an online business, but it is an entirely different thing to make it profitable.
Starting up an online business is relatively easy nowadays, thanks to the internet and the favourable startup ecosystem. That is why you can see so many new businesses springing up almost every day.
However, if your business venture is not profitable, you won’t be able to sustain it in the long term. This is where product pricing strategies become important, as they directly contribute to your revenue stream.
Hence, this guide discusses some of the most effective pricing strategies today. Read on!
5 Effective Product Pricing Plans That You Can Implement For Your Business
1. Competition-Based Pricing
Adopting a competition-based pricing plan is naturally the best strategy if you want to beat your rivals. It is based on the current market rate of products instead of consumer demands. For this purpose, it takes into account the prices offered by competing businesses.
2. Dynamic Pricing
The dynamic pricing strategy is based entirely on consumer demands, which is why it is also known as demand pricing or surge pricing. If a product has a higher demand, it implies that consumers are willing to pay a higher price to purchase that product. As such, you can utilize this plan to maximize your profits.
3. Freemium Pricing
In a freemium strategy, businesses offer a basic version of their product for free. This helps consumers to make up their minds about it, making it convenient for them. If they like it, they will pay a premium to keep using it or unlock all of its features. Such a plan is beneficial for the business, too, as it helps to attract new customers easily.
4. Penetration Pricing
This is a highly competitive, short-term strategy that is used by new businesses to create a strong foothold in the market. In such a plan, the business offers its products at extremely low prices, which helps to draw the attention of customers away from highly-priced competitors. And once a strong enough market presence has been generated, the prices can be raised accordingly
5. High-Low Pricing
A high-low pricing plan helps businesses generate revenue uniformly over time. In this strategy, the product is initially offered at a higher price, but the pricing is adjusted as it becomes older. These adjustments can include occasional discounts and sales as well, which is why it is also known as discount pricing.
If you want to stay ahead of the competition, you must adopt a strong pricing plan. That’s where the above strategies come into play, for they allow your business to generate significant revenues for long-term growth.
Of course, there are many other pricing plans that you can use, but the ones described above are the best for gaining a competitive edge in the market. So, if you want your business to stay ahead, get in touch with eCommerce experts now!Tags: eCommerce experts, Product Pricing Plans